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Meet IQ extreme!

Invest and allocate assets like an expert

The selection of assets through a brand-new algorithm for mixed integer optimization.

Quantum Inspired

Portfolio optimization and asset allocation

Portfolio optimization is the process of selecting the best portfolio (asset distribution), out of the set of all portfolios being considered, according to some objective. The objective typically maximizes factors such as expected return, and minimizes costs like financial risk.

What is quantum-inspired optimization? Simulating the quantum effects on classical computers has led to the development of new types of quantum solutions. Quantum-Inspired Optimization algorithms exploit some of the advantages of quantum computing on classical hardware, providing a speedup over traditional approaches

Use case

For Portfolio Optimization --> Selection of a basket of N assets from a universe of thousands of financial instruments, optimizing return for given goals of risk, diversification and ESG scoring.

For Asset Allocation --> Transforming portfolio weights into a discrete asset allocation so that budget is completely adjusted and transaction costs are minimized.

Demo

Results Overview

For Portfolio Optimization --> Selection of a basket of N assets from a universe of thousands of financial instruments, optimizing return for given goals of risk, diversification and ESG scoring.

Problem

  • Selecting a basket of N assets from thousands of instruments is an exponential combinatorial problem, frequently solved sub-optimally.

  • Standard algorithms are suboptimal when dealing with fixed transaction costs and discrete asset allocation.

Quantum Inspired advantages

  • Fast calculation of efficient frontier for a universe of thousands of assets (example shown: EF of 10 assets from 480 in SP500).

  • Savings in transaction costs.

  • Added portfolio value with respect to standard optimization techniques.

  • Ideal for trading with lots that are an integer multiple of a standard lot size.

Gallery

Why Quantum Inspired here?

For Portfolio Optimization --> Selection of a basket of N assets from a universe of thousands of financial instruments, optimizing return for given goals of risk, diversification and ESG scoring.

Companies using IQ-Extreme

  • What is quantum computing?
    A quantum-inspired algorithm has its origins in the study of quantum computing and systems. Yet, they can be executed in conventional computers! Programming a quantum computer constitutes a new way of thinking and solving computationally hard problems, also for normal computers.
  • What is quantum-inspired advantage?
    For many problems, quantum-inspired algorithms obtain some of the promised advantages of quantum hardware. These advantages could result in computational speedups, better solutions, or memory savings. We make the most of these advantages to provide business value to our customers.
  • Why are quantum-inspired solutions better than traditional ones?
    We benefit from the insight and the understanding of hard problems using quantum information frameworks. Quite often, a simple redefinition of the problem opens the door to innovative solutions with significant speedups. Other times, we can transform quantum algorithms into classical algorithms that provide heuristic speedups. We could not find those algorithms without understanding how quantum systems work.
  • Is quantum-inspired computation just a form of supercomputing?
    Yes and no. Quantum-inspired algorithms can run on individual computers, on big clusters, on SaaS architectures and on many different types of architectures and installations. Our own API is delivered as an AWS Lambda service that can be upgraded to AWS E3 images running on demand, depending on the service contract.
  • Are quantum-inspired solutions compatible with quantum computers?
    Because they are inspired by quantum algorithms, quantum-inspired solutions share conventions, problem definitions and most characteristics with the corresponding quantum computing algorithms. Hence, due to the «black-box» nature of both approaches, both solutions are largely interchangeable. In case of doubt, our team can help you develop future-proof solutions that benefit from both approaches.
  • Do you just simulate a quantum computer? Is this like Qiskit or Cirq?
    No. Some quantum-inspired algorithms that we develop are inspired by quantum computing, but they are designed from scratch to create new, extremely efficient algorithms that do not imitate universal quantum computers.
  • Will quantum computers make all classical computation obsolete?
    No. Quantum computers are fragile and expensive. It is therefore a waste of resources to run classical computations on quantum computers for many tasks. Classical algorithms are not magically accelerated by running on a quantum computer; on the contrary, qubits are usually slower than ordinary bits, and quantum speedups are not worthwhile in some cases. Quantum algorithms may require very little entanglement, and in that case, it is preferable to use a quantum-inspired algorithm that will run faster on ordinary hardware.
  • Can we always replace a quantum computer with a quantum-inspired solution?
    No. A few quantum algorithms provide exponential speedups, such as factoring, for which there are no classical alternatives. In exceptional situations those speedups are provably unique, and cannot be reproduced by classical computation means.

FAQs

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